DaimlerChrysler UK Limited Signs New Dealer Contracts

DaimlerChrysler meets the challenge of new European Block Exemption
legislation

New sales and after sales contracts for retail partners

Europe-wide harmonisation of contracts and standards

Well in advance of the implementation of the new European Motor Vehicle
Block Exemption regulations, which will govern the way new motor vehicles
are distributed and serviced throughout Europe after the end of September
2003, DaimlerChrysler UK Limited, the UK importer for the Mercedes-Benz,
Chrysler, Jeep, smart & Mitsubishi Canter brands, has signed new contracts
with its retail partners for both sales and after sales.

The contracts, effective from October 2003, have been harmonised across Europe and contain clearly defined uniform standards that guarantee the premium standing of the brands within a selective distribution system, while maintaining the economic appeal of the brands for sales and service partners. The contracts, as well as the standards, have been formulated throughout in close consultation with the company's sales and after-sales partners.

With this benchmark achievement, DaimlerChrysler UK now leads the UK motor industry in preparing itself and its dealers for the new legislation and its impact on the way business is conducted. The company's aim in this process has been to safeguard the customer's experience of each individual brand and to ensure that DaimlerChrysler UK's vision, "To deliver the finest automotive experience in the UK" is met in full.

As the final papers were signed, DaimlerChrysler UK Limited Managing Director, Joachim Eberhardt, described the successful conclusion of the process of issuing new contracts as "A best-practice example of manufacturer and dealer network working together in partnership to face the challenges of the future." Looking forward, he commented: "We are delighted by the commitment all our dealer partners have demonstrated by their willingness to invest in our joint business interests, and we see a dynamic future for all our brands in the UK."

For the Mercedes-Benz Passenger Car dealer network the signing of the new contracts represents the next stage in a restructuring that commenced in December 2000. The new network of 29 partners, each with a central retail point coordinating a network of sales and service satellites (156 points in total in the UK), will help to ensure consistency in standards and service throughout the country. The major conurbations of London, Birmingham and Manchester will be operated by a subsidiary company formed in 2001, DaimlerChrysler UK Retail, while a further 28 partners have now also committed to the new contracts.

The signing of the new contracts for Mercedes-Benz commercial vehicles coincided with the completion of a review of the commercial vehicle dealer network. The new network, which was finalised with considerable input from the dealers, will take shape over the coming two years and is designed to increase significantly the service levels offered to commercial vehicle customers. When completed, it will consist of 104 outlets operated by 25 partners.

Chrysler and Jeep in the future will be represented by 57 dealers, who will operate a total of 93 outlets with new unified standards across the network.

At the DaimlerChrysler headquarter building in Milton Keynes on 24 September, 37 of the partners for the Chrysler and Jeep brands going forward showed their commitment to the brands in a joint contract signing ceremony. The remaining dealers, who had been unable to attend this event, received and signed their contracts at their own premises.

The innovative smart two-seater city coupe, cabriolet and, in future, roadster and roadster coupe, will be distributed through a network that is set to grow beyond the current 42 outlets around the UK. Under a separate arrangement, these will be refranchised before the end of the year to reflect the new European Block Exemption legislation, as will arrangements with partners for the Mitsubishi Canter light truck.

As Joachim Eberhardt said: "The changes in European Block Exemption regulations have led to a period of some uncertainty and inconvenience for our customers, but we are confident that we and our retail partners will continue to be in the best possible position to work in a concerted effort to the benefit of all our customers."